Posted
by
timothy
on Thursday January 03, 2013 @02:41PM
from the thought-they-were-made-here-in-america dept.

First time accepted submitter master_kaos writes "Canada is going to stop producing pennies in February 2013 to help save the tax payers $11 million per year. Cash transactions will be rounded to the nearest nickel. Cheque/Credit Card transactions are not affected."

Did you miss the part where it said purchases would be rounded to the nearest nickle?
As a Canadian I can tell you that the pennies will disappear quickly, because the banks have been told to collect them.
The place I get my morning breakfast has already started rounding to the nearest nickle. My breakfast comes to $3.66 total, and I am always asked for $3.65

Here in Switzerland we have done away with them since a very very very long time ago. BTW a Swiss Franc is slightly worth more than a USD or CAD. I personally prefer it that way. Actually I prefer the debit transaction system we have. I can have a 100 CHF in my pockets and it will last me for about 1 to 2 months.

Here in Switzerland we have done away with them since a very very very long time ago.

I guess Wikipedia is lying to me then, as it implies that the 1 rappen coin was in production until 2006 and the 5 rappen coin is still in production ("nickel" is the nickname of the USD and CAD 5 cent pieces).

The one dollar bill of the US just confounds me.

Good thing Canada doesn't produce dollar bills any more and instead uses the $1 loonie coin and $2 toonie coin.

The US has had a $1 coin in regular circulation since 1999 (and special printings in 1979-1981 before that). However, the government hasn't been able to convince people to use them instead o

This is an example of US government stupidity. All they have to do is stop making $1 bills. The rest will take care of itself.
In Canada the banks were told to collect $1 bills and turn them over to the mint. It took about a year for the $1 bill to disappear.

No, because the DERP squad is pumping out many megabytes of emails and Facebook postings that say "FWD: FWD: FWD: RE: RE: FWD: FWD Don't accept the dollar coins because they don't have 'In God we Trust'' on them!!!!!!"

The US has had a $1 coin in regular circulation since 1999 (and special printings in 1979-1981 before that). However, the government hasn't been able to convince people to use them instead of dollar bills.

They don't have to persuade. They just have to stop printing dollar bills, and continue to withdraw used dollar bills that come into the banking system in a worn state. Problem solved.

Here in Switzerland we have done away with them since a very very very long time ago

This is because in Europe the value-added taxes are built into the price, whereas here in Canada they are added to the price. As a result, you end up with an item priced at $6.99 costing costing $7.83 when it comes time to pay. You rarely see prices like that in Europe, so there's little use for a 'penny' or a 'nickel.'

I do question cashier's ability to cope, though. Even today, if I'm buying an item that is $7.83 and

I still can't fathom how posting "prices" that are different from what you actually pay may be considered a good idea.

It adds to customer confusion, cashier's work, and the benefit is... what? That it stresses how much the government gouges you for? That's not useful for anything but a political statement, and if so, it should note the credit card robbery as well.

I believe prices SHOULD include all taxes, but to address your points -

It adds to customer confusion

Not really. The only customers who are confused are tourists from outside North America. Everyone here understands that when the price says $6.99 they will be expected to pay more than $6.99 - So no, there's no confusion.

cashier's work

Well, the cash register does all the math so there's little extra work other than the 1.5 seconds it takes to count out four or less pennies.

The only customers who are confused are tourists from outside North America. Everyone here understands that when the price says $6.99 they will be expected to pay more than $6.99 - So no, there's no confusion.

Which is a problem if you have only a small amount of cash on you, and don't know whether you're ok or you'll need to run to an ATM machine.

I do question cashier's ability to cope, though. Even today, if I'm buying an item that is $7.83 and I present $8 and say "keep the pennies" the cashier becomes VERY confused. S/he's very used to counting out all the change, and leaving change in her drawer is puzzling to them. I guess once there are no pennies in there, the problem will go away.

This is because the cashier is required to balance their till at the end of the day, and a discrepancy of more than a tiny threshold in either direction will have

Damn straight! As an American expat in Canada, I truly truly hate returning to the states and getting a wallet full of ones. Having $1 and $2 coins makes money so much easier to deal with. I say let's go the next step now: throw out the nickel and quarter, and give us a $.50 piece.

1. The Currency Act [justice.gc.ca] already has provisions for jokers like you. The penny is not legal tender for a payment of over 25 cents. Similar limitations are in place for all coins.

2. Worn? You're talking about a steel disc. Pennies don't wear out, they get considered worthless and tossed in jars (or worse, the trash) and more need to be made to maintain its availability for circulation.

This is an interesting part. I've noticed recently there have been more and more places where the Cash price differs from the Credit price. It used to be this way growing up, and they're going back to it because of all the problems and costs associated with Credit. And yes, it's Cheaper to pay with Cash. (a few gas stations here charge 10 cents or more per gallon for credit over cash transactions.)

Did you miss the part where it said only CASH transactions would be rounded? Seems to me that cash transactions themselves are becoming increasingly rare and this is a pretty big non-issue in a plastic money world.

Have you ever run a business? Having a books balancing issue because a even few transactions are in cash will encourage all prices to the nearest nickle. Its just too much of a hassle to have every transaction in the cash register off by a couple cents. Cash businesses would go nuts trying to get their books to balance.

In most cases rounding will go UP by a penny or four, because of the tendency to price things at xxx.99.

Because taxes do wonder things to multiplying x.99 to things that also end in values that need to be rounded up. Sure.

To be clear, I'm being sarcastic.

[...] because retailers will round ALL prices up to the next nickle, whether payment is by cash, credit, or check.

Yes, I know the definition of rounding, but mark my words, nobody will be rounding down.

Except that rounding only happens for cash transactions. Debit/credit/etc pays the same not-rounded-to-a-nickle amount as before, regardless to whether the user would have saved or spent a few pennies more.

Hell, because of that rule, Canadians have more power to save money. Just debit when you'd have to round up, and pay cash when it rounds down!

If the idea was to save the government 11 million by dropping the penny, and government suffers from lower tax revenue as a result,then the savings are imaginary at best.They are bound to come back and raise the taxes to make up the difference.

The reason the penny costs so much to keep in circulation is not solely the cost of minting. If a penny costs $0.02 to mint but is used in 10,000 transaction in it's life time that would be ok.

The problem with the penny is that they don't get spent. The mint needs to keep producing new ones for retailers to give out and people go home and throw them in a coffee can.

Oddly, this is the exact argument in favour of $1, $2, and $5 coins. People don't spend coins as easily, they tend fall between couch cushions or collect in jars. Until those jars are emptied, and the couch cleaned those coins are basically a kind of interest free loan the government.

The higher denominations are always more likely to be spent though. If you have a jar of 1c coins vs a jar of $1 coins, a person is more likely to dip into the $1 jar than the 1c jar. Who wants to count out 1500c for a 6 pack of beer? I'd rather I with the 15 $1 coins.

As a side note, us Aussies got rid of our 1c & 2c coins years ago, hasn't hurt our economy, & our dollar is at US$1.05.

If the metal in the penny was worth more than the penny people would be melting them down, as they did with gold coins. Clearly that is not happening.

Yes, it did happen. Then they made it illegal. There's not enough money in it for that; if you're going to do something illegal to make money, you're going to want something that makes more money than this.

I have wondered for years how long it would take us Canadians to finally get rid of that awful piece of currency. Especially given that it takes more money to produce it than it is actually worth. No one can buy anything with pennies anymore and they really are nothing more than just metal wasting space. Plus, vending machines have never taken them which has made them even more useless than before.

The Mint stopped making new pennies last May (http://www.cbc.ca/news/canada/manitoba/story/2012/05/04/mb-canada-last-penny-mint.html). But they are still in circulation. What happens on February 4th is the Mint stops putting pennies it gets back into circulation. What is unclear is when exactly stores will be required to stop giving pennies out.

Nope, up here in Canada, gas is still sold in cents/litre. But when they get rid of the penny, they'll round the total. Watch as millions of Canadians pump just the right amount of gas into their tank so that the price is always rounded down.

I can't remember the last time I paid cash for gas in Canada. In fact, I think the only time in my life I paid cash for gasoline was in Florida when the pump wouldn't accept my Canadian credit card. I had to go in, give $50, buy my gas, and then go in again to get my change.

Nope, up here in Canada, gas is still sold in cents/litre. But when they get rid of the penny, they'll round the total. Watch as millions of Canadians pump just the right amount of gas into their tank so that the price is always rounded down.

A quick reprogramming of the pump will fix that to always increment in 5 cent increments.

So the first drop you pump, it would go from $0.00 to $0.05, then where it would've said $0.06-0.09, it would read $0.10. So the pump always magically rounds up.

I would have approximately no faith in that article, because the way that the company who wrote it makes its money is by convincing people to buy precious metals, which means it's in their financial interest to spread stories that create a potentially false impression that US currency is worthless.

This reminds me of what happened when the $5 and over denominations were redesigned a few years ago. Tom Selleck, who turns out to be another crazy right-wing bastard, was interviewed and complained that our currency was now "funny money." No it's not... it was just redesigned, you prick.

Yeah... you'd see a lot of the same idiocy getting rid of the penny and it would all be complaints about how change (no pun intended) is bad.

The penny is just as pointless in the USA as it is in Canada. Of course, the USA is considerably behind Canada in recognizing the changes wrought by inflation. In addition to abolishing the penny, it should abolish the dollar bill and introduce a $2 coin as Canada did many years ago. (If you wanted to be really far-sighted, you could establish a plan for when to abolish the nickel and the $5 bill and introduce a $5 coin.)

Unfortunately, currency reform would not only face stiff opposition from the zinc lobby (because penny is largely zinc now), but from the politically well-connected Crane Company in Massachusetts, which manufactures all of the paper used in printing US currency. The absurdity of vending machines and tollbooths needing to accept paper money (much more expensive than coins) counts for nothing as against a corporation with skilled lobbyists.

Here in Norway we been doing this for years:
- The 1 øre and 2 øre coins disappeared in '74
- The 5 øre and 25 øre coins were withdrawn in '84
- The 10 øre coin ended being legal tender in '92
- The 50 øre coin was withdrawn May 1st last year.
So while I can still recall putting a 5øre coin in my piggy-bank, there is now no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices ha

Retailers round the final total at the till, not the individual item prices, so unless you're just buying just one item your bill is just as likely to go down as up.(by a whole 2 cents maximum). Electronic transactions are not rounded.

We also replaced one dollar and two dollar notes with coins, again with no dramas.

China and India are both transforming their economies to be more like the west, creating a larger middle class in those countries. A larger middle class wants bigger and better housing. With China and India making up almost 4 billion people together, that is a lot of new housing, and a lot of copper that needs to go into making those houses. Supply of copper has not been able to keep up with demand. How do you expect prices of copper to stay low if the demand shoots through the roof for copper and supply do

I agree that there are only so many resources to go around; consequently, prices will change based on the demand and availability of those resources until they reach an equilibrium. If there isn't enough copper *at all*, people will need to make due either without or with a substitute (or expensive reserves in the ground will be more appealing to dig up).

In America, right now, we have a huge overhang in housing, bad debt, and underemployed people. Because of low prices these things have been pulled from the market – but when prices go up these things pop back on the market driving prices back down. So, if you are trying to sell your house or your labor (or even trying to get a raise) it’s tough.

Japan has been struggling with this for a better part of a decade now. The Fed, via QE, has been dumping

There hasn't been any significant copper in a canadian penny since 1996.

94% steel, 1.5% nickel, 4.5% copper (as plating)

A big problem is that the penny is just useless. Nobody uses them, except maybe a handful of annoying old grannies who take 25 minutes to buy a cup of coffee.

So, they just get tossed into coin jars. Since they disappear from circulation almost immediately, and the government is (was) minting increasing amounts to make up for this. They don't get used either, just tossed into coin jars.

Those old copper pennies, from pre 1996, are worth ~2 cents, but the value of copper fluctuates pretty wildly.

The fact that there is such a thing as inflation is no shock to anybody, and not really a part of this story.

I think the more important question, brought to my mind by the Death to Pennies video [youtube.com], is whether they'll round in all cases or just when paying with cash. There's obviously no need to round if you're using a debit or credit card.

The video makes the very informative point that when you're fiddling around with actual physical pennies at the register you're wasting not only your own time, but the time of everyone in line behind you. The difference of plus or minus a couple pennies literally isn't worth the

Well the US Military stores (BX/PX/Commissary) have been doing this in Europe for their cash transactions for a long time (at least the 10 years I've been here). Seeing a penny is pretty rare. Apparently it wasn't worth the cost to ship them here from the USA.

I really doubt this will happen. For the 3 to 4 cents you might gain it is just not worth the risk that someone might pull out their phone, calculate it and throw a major fit in your store. Even if no one ever throws a fit, word will get around, (See internet) and people will simply not shop at retailers who do this.
I usually have very little faith in people, but in this case I will tend to believe in honesty.

Plus, the rounding will present such a hassle, that pricing will all be to the nickle, nobody is going to want to balance books that could be off by several hundred dollars over the course of a busy day.

All prices will end in 0 or 5 and no merchant is going to go down, everyone will just set prices directly to the next higher multiple.

More of interest, is the sales tax. Does Canada have sales taxes anywhere? Are they going to be adjusted to the nickle as well?Will the tax authority accept taxes that

it is just not worth the risk that someone might pull out their phone, calculate it...

I have no idea what the antecedent for "it" is here. Calculate what? The price rounded down? How many people will need a smartphone to calculate a rounded-to-a-nickel price? Not many.

...and people will simply not shop at retailers who do this.

People will get over this pretty quickly, if they even notice the two or three cent price increase on every product that is currently ending in 1, 2, 6 or 7. People who buy 10 widgets that used to cost $0.67 and is changed to $0.69 will pay twenty cents more overall. Everyone who buys just one will pay three cents more than t

it is just not worth the risk that someone might pull out their phone, calculate it...

I have no idea what the antecedent for "it" is here. Calculate what? The price rounded down? How many people will need a smartphone to calculate a rounded-to-a-nickel price? Not many.

The need for calculation here is because we have a 13% "Harmonized Sales Tax" in Ontario, and various combinations of Federal and Provinical taxes across Canada depending on which province you're in. Thus, when you pick up a can of Pringles for $2.99, it really costs $3.38 after tax - which would round up to $3.40. If they mark the Pringles down to $2.97, after tax it's $3.36, which _should_ round to $3.35, but some retailers will try to charge $3.40 anyways, and blame the difference on "tax" - since the

Cash registers are not going to show the rounded cost, there are going to show the actual cost. The rounding will be done manually IF you pay cash. The law stipulates rounding down for 1,2 and up for 3,4 cents.

Nothing changes except your change. The government collects the same taxes, the merchants balance sheet is the same, the ONLY change is the FEW cash transactions.

Yes, when I can buy more than one item at a time. The rounding is on the entire transaction.If the customer can buy 3 or more random items at a time, please demonstrate a pricing scheme that would consistently cause the customer to pay an extra $0.02.

If they can set the prices, they can set their own rounding policy. Regardless of if they declare any transaction total ending with 0.01 or 0.02 will be rounded up,

The merchant can declare no such thing. Transactions ending in 1 or 2 round down to the 0. Ending in 6 or 7, down to the 5. Period, end of story.And again, it is for the entire transaction. Over time, your personal purchases average out.

When I was in Australia in the '90s, they had already eliminated their coins smaller than 5 cents, and the common practice was to always round down cash transactions. So, if your total was $1.99 and you paid with cash, you'd only get charged $1.95. If you paid with EFTPOS (debit card) or a credit card, you'd be charged the full $1.99.

Depends. I suspect that "We always round cash down!!" will be plastered in quite a few front windows to try to attract customers. Of course it's easy for merchants to game the original price so this always works out in their favor. Depending on how much the CC companies are gouging the merchant, always rounding in the customer's favor might actually save both the customer and merchant money if more people pay cash.

In any case, I wouldn't really care. Given the amount of cash transactions I make every year,

Not necessarily. In Finland they did the rounding too and I would sometimes get things rounded in my favor (not sure if Swedish rounding used). However the majority of the time with prepackaged goods the prices were pre-rounded anyway (and included tax). So the rounding that I noticed only came when buying something that had to be weighed.

Consider it this way. What do the stores do today if the actual price ends up with a fractional part of a penny left over? Is it rounded in your favor or towards the

while it is entirely conceivable (and probable to occur) to rig prices to always cause a round-up, even with taxes... that really only applies for single item purchases where the final price can be exactly determined.. and then it's only for the cash transactions. overall, that combination of a single item and cash sale is probably pretty small. multiple item purchases will balance out, as their totals and whether they will round up or down can't reliably be determined ahead of time. and of course, non-cash

Does the law cover that? If not then marketers can still sell things for 9.99. If you buy 5 items at 9.99 then the total comes to 49.95. You buy 4 items and then buy 1 item later you bill comes to 50.00.

The problem with that idea isn't that it doesn't make sense, but that it would have a negative psychological appeal. Everyone who isn't a 10+ millionaire would suddenly stop being a millionaire. Million dollar houses wouldn't be.

And who wants to work for $10,000 per year? Or work for 75 cents an hour on minimum wage?

You are an idiot!
Next time know what you are talking about before you start typing.
From the Canadian mint website. The cost to phase out the penny is 37M, with as saving of 11M a year.
In only 4 years there is a profit.